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The cloud shooting itself on the foot: dispatch.io/.cc and do.com
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Posted by Paul Korm
Oct 26, 2013 at 08:32 PM
This is what fuels firms such as Y Combinator and their peers. It is cheaper and offers more control for the money crowd to find small handsful of hungry (literally) young developers with product ideas and carrot-and-stick them into launching their little business, ripen them, and then sell or merge them. The buyers of these small businesses are frequently more interested in the skills that the small entrepreneurs developed with Y Combinator’s money, than the products. So, Y Combinator funds the skill building of the competent, shakes the losers out of the market, and then gets a tidy profit for their efforts. In this model, many if not most of the cloud-based upstarts are really just journeymen indentured to the VC who then sell forward the indenture after the journeyman creates the masterwork that proves their skillfulness. It’s not the masterwork that matters—it is the workman. (Or woman—no gender slights intended here.)
22111 wrote:
“For Dispatch’s founders, the acquisition by Meetup is considered
>success—and maybe it is in the short term.”
>
>What you didn’t grasp is the fact that THAT had been their business
>model from start on, to be bought.
>
Posted by Alexander Deliyannis
Oct 26, 2013 at 09:41 PM
Dr Andus wrote:
>>I would be more likely to trust a service that is a labour of love and
>>run by two guys from their garage, than a hip start-up with huge VC
>>support from the Valley…
[...]
>>But then I am not a business buyer, so the cloud services I tend to use
>>for my professional needs (the likes of Workflowy and Gingko) are
>>probably less attractive for large corporations to acquire (and kill
>>off), and they are more likely to survive on subscriptions from
>>enthusiasts (probably many of them academics and their students).
[...]
>And I get a warm feeling from supporting such small businesses for some
>reason, which I don’t get from supporting a venture capital fund…
My impression is that both Workflowy https://news.ycombinator.com/item?id=1870473 and Gingko https://news.ycombinator.com/item?id=6302825 are Y Combinator funded… see Paul’s post for more on YC’s logic.
Let’s not hold any illusions here: tools like Workflowy and Gingko are not garage operations; not when they start serving tens of thousands of users who rely on these tools regularly and have very limited patience. You need serious money to support the server power and software debugging and maintenance over a reasonable period.
The ‘two guys’ are just the tip of the iceberg; there’s surely a lot of outsourcing involved, as well as ‘unsung heroes’ in the backstage. Check out Hojoki’s team—which appears to be self-contained—to get an idea of what is needed http://hojoki.com/hojoki-huwhat/
The benefits of developing applications for the web are soon outweighed by its complexities as things start getting serious. Think scaling, latency and browser compatibility issues, not to mention integration challenges as you try to cross-market your product with the Dropboxes, Evernotes and Googles that your prospective clientele is already dependent on.
Posted by Alexander Deliyannis
Oct 26, 2013 at 10:07 PM
Paul Korm wrote:
>So, Y Combinator funds the skill building of the competent, shakes
>the losers out of the market, and then gets a tidy profit for their efforts.
>In this model, many if not most of the cloud-based upstarts are really
>just journeymen indentured to the VC who then sell forward the
>indenture after the journeyman creates the masterwork that proves
>their skillfulness. It’s not the masterwork that matters—it is the
>workman. (Or woman—no gender slights intended here.)
Paul, thanks, I suspected that this was the logic, when reading the CVs of various 25-30 y.o. CEOs which proudly included how many startups they had founded and then closed or sold. But I had no idea of its extent, and was still hoping that Rework’s “build a business, not a startup” common sense approach had gained some ground.
In any case, the investment logic behind what’s happening does not change my main point: that eventually users will have startup fatigue. Most importantly, we are no longer talking about kids trying out the latest free social network, but about businesses looking for tools to help their work. And when these are recalled, the businesses lose money.
Last but not least, though I wrote more about Dispatch, the Manymoon/Do.com fiasco is probably much more noteworthy: Manymoon was a successful commercial tool. I had tested it within the context of a market research on online project management tools, and it was a serious candidate for a major 5-year project. We eventually rejected it because it didn’t have a very specific feature we needed. When Salesforce bought it, it seemed as if they really wanted to popularise it more—the fact that they castrated it along the way is secondary. Take a look at some of Do.com’s clients: https://blog.do.com/stories Is it possible that they will take the shutdown lightly?
Posted by Dr Andus
Oct 26, 2013 at 10:46 PM
Alexander Deliyannis wrote:
>My impression is that both Workflowy
>https://news.ycombinator.com/item?id=1870473 and Gingko
>https://news.ycombinator.com/item?id=6302825 are Y Combinator funded…
>
>Let’s not hold any illusions here: tools like Workflowy and Gingko are
>not garage operations; not when they start serving tens of thousands of
>users who rely on these tools regularly and have very limited patience.
>You need serious money to support the server power and software
>debugging and maintenance over a reasonable period.
Thanks, interesting… You’re right about WorkFlowy re YC funding. But as far as I understand, Gingko was merely featured on HN (as part of the “Show HN” feature), which doesn’t in itself mean YC funding. At least they’re not on the YC list of funded companies:
http://yclist.com/
It is my general sense though that Gingko are merely starting out (after all they were only just offering the lifetime membership to their first 500 customers), while WorkFlowy has just mentioned on their blog today that they have 600,000 users:
http://blog.workflowy.com/post/65084158466/we-dont-blog-because-were-busy-building-workflowy
They also said “WorkFlowy is a successful small business” and “there are only two of us,” which is why I thought of them as a garage operation…
Posted by Stephen Zeoli
Oct 27, 2013 at 11:03 AM
Thanks for starting this interesting thread, Alexander. You’ve raised issues I was totally unaware of, though I’ve had a growing suspicion about cloud services for a while now. A friend and I have (only partially) joked about creating a tee-shirt that says on the back “I use the cloud” and on the front “but I don’t trust the cloud.”
Though in thinking about this, I realize there are two distinct “cloud” issues here: 1. Trusting your data to the cloud for use on local devices with locally running apps. 2. Trusting cloud-based apps.
I am pretty comfortable with the first issue, especially in the case of Dropbox, where you keep a local copy of the data. Not only is the data safe, but it is safer, because you have the cloud back up (as long as you trust that it can’t be hacked). But I really see no reason to trust cloud-based apps. Over and over they have been proved unreliable, as your original post demonstrates. I suppose if your goal is collaboration, especially with colleagues outside your local area network, you have no choice but to use the cloud. As your experience demonstrates, however, “unbuyer beware.” (i.e. if it is free, it probably won’t be around long).
Steve Z.